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Section 311(b) of the American Invents Act (“AIA”) provides that a petitioner may request cancellation of one or more claims of a patent “only on a ground that could be raised under section 102 and 103 and only on the basis of prior art consisting of patents or printed publications.” In light of this clear restriction on the evidence that can lead to the cancellation of a claim, one might reasonably assume that all of the petitioner’s evidence during that trial must be prior art. A recent decision from the Federal Circuit, however, shows that this assumption is not entirely correct. Rather, in some situations, the cancellation of a claim may turn on evidence that is not even prior art to the claim.

A hallmark of IPR proceedings is that the petitioner—not the patent owner—has the burden to prove that the challenged claims are unpatentable. This hallmark is statutory as section 316(e) of the American Invents Act (which created IPRs) provides that “the petitioner shall have the burden of proving a proposition of unpatentability.” And yet, a recent decision from the Federal Circuit confirms IPR nonetheless applies the traditional rule that can shift a burden to the patent owner to rebut the petitioner’s prima facie case of obviousness. Patent owners thus cannot blindly rely upon section 316(e) and, in certain circumstances, should consider submitting evidence to defend the claims.

As discussed in our prior post, the Supreme Court is poised to issue decisions in two cases about IPRs. The first case is Oil States Energy Services v. Greene’s Energy Group, which could eliminate IPRs and gut the PTAB role in reviewing issued patents. The second case, SAS Institute Inc. v. Iancu, could balloon the PTAB’s workload with new requirements. Although SAS has not garnered the limelight like Oil States, its potential to reshape IPRs is just as significant. The issue at stake—the propriety of the PTAB’s practice of instituting review on only some of the challenged claims rather than all of the challenged claims—does not threaten to eliminate IPRs entirely. SAS does, however, raise the possibility of a dramatic change in how IPRs occur, how they are reviewed in the courts, and how they affect litigation.

The Supreme Court is poised to issue decisions in two IPR-related cases that some predict will end IPRs as we know them. One of the cases, Oil States Energy Services v. Greene's Energy Group, could eliminate IPRs and gut the PTAB’s role in reviewing issued patents. The other case, SAS Institute Inc. v. Iancu, could balloon the PTAB’s workload and could expose those requesting review of patents to greater risk if they fail to fully make their case.

As with all prophecies of the end (so far), prophesies of the end of IPRs could also be premature, as the Supreme Court could simply allow IPRs to continue in their current form. Read on for a brief refresher on the context of Oil States, and stay tuned for a preview of SAS. We will also cover the decisions as they come down, so be sure to subscribe to get the latest news.

A Native American tribe’s recent deal to obtain several pharmaceutical patents and seek dismissal of pending IPRs on the basis of sovereign immunity has piqued the public’s interest in sovereign immunity to IPR. The same tribe also recently asserted several other patents against Microsoft and Amazon, and may assert sovereign immunity from IPR there too. Prompted by the tribe’s actions, a subcommittee of the House Judiciary Committee held a hearing on what Congress can and should do about it. Although much of the hearing focused on what many perceive as the problem of tribal sovereign immunity in IPR—not the use of sovereign immunity to IPR by state universities—many of the proposed reforms would also target state universities. Whether any of these reforms will be enacted remains to be seen, but there are reasons to doubt their constitutionality.

To many patent owners in IPR, the prospect of a patent-saving claim amendment is all but illusory. The Board grants few motions to amend, which is one reason that few patent owners even request amendment. That may change with the Federal Circuit’s en banc decision in Aqua Products, Inc. v. Matal, which eased the patent owner’s burden of justifying an amendment, and increased the petitioner’s burden of opposing an amendment. This change affects not only the procedure of IPRs, which must now take into account the shifted burden, but also the strategy of IPRs.

Parties accused of patent infringement often turn to IPRs to invalidate the asserted patents, and winning in an IPR can mean relief from whatever remedy would be imposed as a consequence of a finding of infringement. That strategy came under examination in a recent decision from the International Trade Commission (ITC), which declined to get rid of an exclusion order (i.e., an injunction) even after the PTAB found the infringed claims unpatentable. That does not mean, however, that the party found to infringe is without options.

For the third time, the Board applied sovereign immunity as a defense to IPR. In Reactive Surfaces Ltd. v. Toyota Motor Corporation (IPR2017-00572 & IPR2016-01914), the Board determined that a public university could raise the defense of sovereign immunity as a reason why it should not be subject to IPR. However, in Reactive Surfaces, the Board refused to dismiss the proceeding because it found that Toyota, a co-owner of the challenged patent that did not claim sovereign immunity, “would represent adequately the [university’s] interests.”

Earlier this week, the use of sovereign immunity as a defense to IPR took a major step forward. For only the second time, the PTAB dismissed an IPR against a state entity on the basis of sovereign immunity—another decision significant to public universities with many patents as well as those who would challenge those patents. This latest decision answers several questions about when the sovereign immunity defense is available to patent owners in IPR.

Patent owners have long known that making consistent arguments during IPRs and in district court litigation is critical to preserve credibility. The Federal Circuit recently took that a step further by holding that patent owners can be prevented from making arguments in district court that contradict their arguments in an IPR. More so than ever, patent owners must watch what they say during an IPR.

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This blog is intended to promote thought and debate on developing areas of the law. The opinions, commentary and characterizations of cases provided on this blog are not legal advice and do not represent the opinions of Wolf Greenfield or its clients.